According to a new study of local authorities, English councils are planning to sell social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in the UK stated that 60% of local authorities are intending to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for selling public land and open spaces to shore up their finances, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
This coalition noted that a high proportion of authorities attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders stated they would focus on restructuring services and using savings to weather growing financial challenges.”
Specific Cases of Planned Disposals
One local authority in southeast England announced its asset disposal plan included the sale of a shopping centre in a local town and a social club in Rochester to raise £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the strategy.
Local Levy Increases and Broader Financial Pressures
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to raise local levies next April to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
The authority said it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures take time to achieve both better provisions and cost efficiency,” said a council leader.
He added: “We face population challenges which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
A survey of regional authorities recently also found council budgets being stretched by the growing number of young people and adults needing Send support.
A network of councils said that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a white paper setting out those changes was recently delayed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (IMD) for UK local authorities, several participating urban areas were included in the most deprived in the country.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“While only a single urban area is among the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The data highlights the extent of difficulties confronting local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the need for a fair and sustainable funding system that reflects and addresses the actual extent of deprivation and demand,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
One in five of councils have reduced or weakened care services in the last year, the survey revealed.
